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GST may apply on Bitcoin trade in india

Indian Governamenet may put GST on bitcoin trades in Indian crypto exchanges.

The indirect tax department has launched an investigation into Bitcoin exchanges operating in India to ascertain at what rate they can be taxed under the goods and services tax (GST) regime, two people with direct knowledge of the matter said.

According to the indirect tax officers, the investigations began probe about a month back and top executives and promoters of some Bitcoin exchanges were asked to explain their business model and how much indirect tax — either service tax or value-added tax — could be levied on the last financial year's revenue Industry insiders said that Bitcoin players, including Indian exchanges, earn their revenue through commission, transaction fees or price arbitrage

Tax experts said calculating indirect tax on the revenue earned by the Bitcoin startups is causing problems due to lack of clarity around the 'place of supply' provisions.

Bitcoin may not qualify as currency or money as it is not a legal tender for Indian indirect tax laws," said Pratik Jain, national leader, indirect tax, PwC. "Therefore, VAT (value-added tax) or GST implications may arise. In case it is sold to overseas customers from India it may qualify as 'export'." However, if there is a commission or fee earned in the transaction, then the business of Bitcoin exchanges is likely to be viewed as a 'service', Jain said. Government may apply GST on bitcoin trade in next year first quarter.And soon Indian exchanges wiil apply GST.COINOME already applying GST 18% on Bitcoin trade.Soon all exchanges will follow the same.